Amazon under fire from Indian trade group over heavy discounts

Amazon has been forced to defend its hold over the market in India after a local trader group accused it of creating an unfair marketplace through its control over inventory.

New e-commerce foreign investment rules came into effect in Indian in February, in an effort to curb heavy online discounting and help small traders compete with international retailers such as Amazon.

Yet traders have complained that larger businesses are now using complex strategies to undermine the rules and spend billions of dollars to keep their prices unsustainably low.

During a panel discussion on Friday organised by India’s competition watchdog and reported by Reuters, the Confederation of All India Traders (CAIT) reiterated its concerns over Amazon’s business model.

Representing 500,000 merchants and traders in India, CAIT asked Amazon’s senior corporate counsel, Rahul Sundaram what “magic” was used to offer heavy discounts at its online marketplace that traders could not replicate offline, according to Reuters.

Sundaram responded by arguing that he had once spent half a day once walking around New Delhi markets to buy an air conditioner and managed to secure a discount of 6,000 rupees.

“It is a factor of the entire retail market that you will get discounts,” he said.

Sundaram added that Amazon was abiding by all the rules and does not influence prices of products its website, adding that the company provides growth opportunities to more than 500,000 sellers online.

In June the Indian government warned Amazon and Walmart’s Flipkart that they must ensure compliance with the new regulation, adding that it will not allow deep discounts that affect small shopkeepers.